Ultra-low cost airlines: onerous restrictions could prevent development of Canada’s aspiring ULCCs

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As weakness undermined the oil sector in Canada’s western provinces, two aspiring ULCCs in the country – Jetlines and Enerjet – slowed their development plans in the face of a new economic reality. Their rival NewLeaf Travel adopted an entirely different path, using idle aircraft capacity freed up as a result of the depressed oil and gas business.

All three entities have engaged in some form of litigation during various phases of their respective development, and NewLeaf finally debuted in Jul-2016 after enduring some regulatory confusion that had thwarted its initial launch in Feb-2016. With roughly two months in business NewLeaf is making some schedule adjustments, but pledges that overall expansion is on the horizon.

Jetlines and Enerjet have sought exemptions from Canada’s foreign ownership rules in order to attract international equity partners, but the government appears to be dragging its heels on a decision, which further clouds the ability of those two companies to bring their ULCC visions to reality.

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